holding defendant insurance company’s liability for underinsured motorist benefits is derivative in nature and concluding an insured who settled with and released a third-party tort-feasor was precluded from recovering underinsured motorist benefits
How later courts described this case
- holding defendant insurance company’s liability for underinsured motorist benefits is derivative in nature and concluding an insured who settled with and released a third-party tort-feasor was precluded from recovering underinsured motorist benefits
- holding that UIM carrier discharged as a matter of law, given derivative nature of carrier’s liability, where plaintiff-insured executed release of claims against tortfeasor
Written by the judges who cited it.
The opinion
ARNOLD, Judge.
Plaintiff contends that the trial court erred in granting summary judgment for the defendant. Specifically, plaintiff argues that the affidavits offered by plaintiff and the State Farm insurance adjuster who was involved in the signing of the release form indicate that the release was executed without any intention to excuse any other persons or firms. Plaintiff, citing
Cunningham v. Brown,
51 N.C. App. 264 , 276 S.E. 2d 718 (1981), contends that the failure to accomplish this result constituted a mutual mistake of fact which required denial of defendant’s motion for summary judgment. We disagree.
The
Cunningham
case is not dispositive on the issue involved in the case
sub judice.
In
Cunningham ,
the plaintiff was a passenger on a motorcycle driven by her husband when they were struck by a tractor-trailer. For consideration, the plaintiff signed a release concerning any claim which she might have had against her husband and his insurance company. As a result of this signing she also released from liability “any other person, firm or corporation charged or chargeable with responsibility or liability,” which included the driver of the other vehicle.
Id.
at 269 , 276 S.E. 2d at 723 .
In
Cunningham ,
the plaintiff claimed that before she signed the release the insurance adjuster assured her that no other claims would be affected. In that case, the court held that the plaintiff could avoid the effect of the signed release by showing that it was procured by fraud or through mutual mistake of fact.
Id.
In the case
sub judice,
such avoidance is not possible because the defendant insurance company’s liability is derivative in nature.
See Durham v. Creech,
32 N.C. App. 55 , 231 S.E. 2d 163
*430
(1977). The policy states that the Travelers Indemnity Company is liable to plaintiff only if the insured is “legally entitled to recover” from the owner or driver of the uninsured motor vehicle. Having settled and signed a release, neither plaintiff nor her husband can recover further damages from the parties covered by State Farm. Both plaintiff and her husband fully intended to release David Givens and Thomas and Jimmy Joe O’Connor, and they are now no longer “legally entitled to recover” from such parties. When the release was signed, the Travelers Indemnity Company was also released as a matter of law because of the derivative nature of the insurance company’s liability. Once the plaintiff released all claims against Givens and the O’Connors, there is no basis of liability on which the defendant insurance company can be held responsible under the terms of the policy. We, therefore, hold that the defendant was entitled to summary judgment as a matter of law. The judgment of the trial court is
Affirmed.
Chief Judge Hedrick and Judge Orr concur.